Bhagwati’s ‘ab ki baar…’ politics

Unsurprisingly, Jagdish Bhagwati is a sort of academic celebrity these days. In addition to the tag of being the most famous living economist to have never won a Nobel prize, Bhagwati has earned himself the credential of being an unabashed supporter of Narendra Modi. This was established beyond doubt when in January, earlier this year, Bhagwati, along with his protégé, Arvind Panagariya (both professors at Columbia University, New York), weighed in with an impassioned response in a letter to the editor on The Economist magazine. This was a response to an article in the same magazine that called upon Modi to atone for his role in the Gujarat riots of 2002. Not in the least bit surprising then that Bhagwati has the ear of the Bharatiya Janata Party, the potential winning side in the parliamentary elections.

Bhagwati and Panagariya have extolled the virtues of governance in Gujarat. Even when going hammer and tongs against Amartya Sen, Bhagwati sought to hang his arguments on Gujarat. His frequent co-author in making these arguments is Panagariya, who has argued, amongst on other issues, that the higher rates of malnutrition in India (compared with even sub-Saharan Africa) is due to the World Health Organization’s adopted metrics which are flawed and put India at a disadvantage. This argument has been picked apart by several discerning researchers.

There is no doubt, however, that this argument would suit Gujarat (where chief minister Modi once suggested innocuously that girls are malnourished because they are beauty conscious), which has seen heavy corporate activity and growth while lagging far behind on indicators such as malnutrition.

It is important to examine the economic model espoused by Bhagwati, a model that he sees demonstrated (in part, at least) in Gujarat and one that his contemporary and friend, the economist Prime Minister Manmohan Singh, was unable to implement in India over the last decade. Much of Bhagwati’s objection to the United Progressive Alliance’s economic policy is about the so-called populist doles propagated by it. However, in last year’s debates on the National Food Security Bill debates, Modi argued that the Bill was not comprehensive enough and pointed to the BJP’s successes in Chhattisgarh where the state government delivered rice at cheaper rates to a larger section of the population than the Bill proposed.

Also, industrialization in Gujarat rests largely on an administrative climate where the state government ensures speedy clearances for corporate investment plans, makes land available cheaply and ignores violations of environmental norms by industry. In these respects, it is not too different from rival Congress-ruled Haryana and Maharashtra. Are giving up public resources for private gain and tolerating unprecedented amounts of revenue foregone in the form of waivers for corporate houses the kind of liberalization policies that Bhagwati would like to see?

Finally, in supporting Modi, Bhagwati credits much of Gujarat’s successes to him. There is plenty of data out there that suggests that Modi has neither transformed nor built Gujarat from scratch. He ignores longitudinal data on Gujarat and its contemporary states that clearly show Gujarat has always been amongst the better performing states in India, at least as far as economic indices are concerned. Also, the most significant leaps out of poverty has been made by states like Bihar, under the leadership of Nitish Kumar. And if there is one thing the Kerala model—that Panagariya (and by extension, Bhagwati?) dislike—should teach us, it is that all-round development is systemic, inclusive and stems from a state-led model that prioritizes the social sector. Most importantly, it makes little sense to credit certain individuals for the development trajectory.

There was some speculation recently about Bhagwati accepting a role with the government of India in case Modi came to power. In his trademark humility, Bhagwati is reported to have been reluctant to accept the position of chief economist (or economic adviser) to the next prime minister, should the opportunity arise. He couldn’t have made a wiser decision, given that the economics of the BJP is quite at odds with that of Modi and what Modi does in his personal fiefdom of Gujarat is possibly impossible to replicate on a national scale. I may be getting ahead of myself. The election results are around the corner and we will know soon enough